All > Business > Finance > Personal Finance
Rehypothecation occurs when your broker, to whom you have hypothecated - or pledged - securities as collateral for a margin loan, pledges those same securities to a bank or other lender to secure a loan to cover the firm's exposure to potential margin account losses.
When you open a margin account, you typically sign a general account agreement with your broker, in which you authorize your broker to rehypothecate.
- Browse Related Terms: Closed-End Loan, Collateral, Debit balance, Guaranteed Student Loan, Lienholder, Loan, Loan Contract, Loan Fee, Loan Modification Provision, Loan proceeds, Loan-to-value ratio (LTV), Payday Loans, PITI, Rehypothecation, Secured Loan, Student Loan, Terms